South Korea, the country with the fourth-largest commercial storage capacity in Asia, has just run out of room to store more oil, sources familiar with the matter told Bloomberg on Monday, as available storage capacity everywhere in the world in shrinking fast amid the demand collapse.
South Korea's total commercial storage capacity on land, at around 38 million barrels, is fully booked, Bloomberg's sources say, while storage capacity is also depleting fast in India, a key oil consumer in Asia and the world's third-largest importer of crude oil.
While South Korea's land storage capacity has been filled up, the Singapore Strait is full of tankers carrying fuel as demand has slumped and as land storage in the region has diminished, analysts and analytics firm tell Bloomberg.
Elsewhere in Asia, in India's nationwide lockdown to contain the pandemic, demand for oil in the country has plunged while storage capacity fills up. Due to plummeting fuel demand and overflowing storage capacity, at least three oil refiners in India have asked for lower crude oil imports for May from the Middle East, including from the world's top exporter, Saudi Arabia, officials at the refiners told Reuters last week.
With demand collapsing, India's oil refiners have already filled 95 percent of their combined storage capacity for fuel of 85 million barrels, officials at three state oil refiners told Bloomberg last week. Even the tanks at the 66,000 fuel stations in India are full, as more than a billion people are under lockdown and not driving.
In the first two weeks of April, India's consumption of gasoline and diesel-more than half of the country's oil demand-crashed by over 60 percent, according to Bloomberg estimates.
According to Goldman Sachs, the oil market is set to test the limits of the global storage capacity within three to four weeks. As much as 20 percent of the world's oil production needs to be shut in so that supply and demand could balance in the short term, Goldman Sachs said in a note carried by Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More